Since education makes a person more likely to leave your region, how do you justify your investment in human capital?

Friday, September 17, 2010

Great Recession Recovery Geography: Pittsburgh Rising

I understand the vigilance against complacency. Pittsburgh is an economic laggard, going into a recession and coming out of it. The economic downturn hitting other places harder than Pittsburgh (post-1982) is also a familiar story. I expect locals to wait for the other shoe to drop. However, I think the current caution is unwarranted.

This isn't your typical recovery. The deck is being reshuffled and new winners are emerging. Relative to the past, Pittsburgh's return to peak employment typically looks sluggish. Relative to the rest of the United States, according to Brookings, Pittsburgh is now leading the pack:

Comparing Great Lakes metros’ low point for employment with their current job numbers shows just how far they have to go in making a full recovery from the Great Recession. Most Great Lakes metros, like the nation as a whole, hit their employment trough in the first quarter of 2010. Since that low point, eight Great Lakes metropolitan areas—Cleveland, Des Moines, Grand Rapids, Indianapolis, Louisville, Madison, Pittsburgh, and Syracuse—have recovered a greater share of jobs lost during the recession than the nation as a whole. Meanwhile, Chicago, Dayton, Detroit, and Milwaukee have recovered less than 2 percent of the jobs that they lost during the recession. Detroit lost more than 350,000 jobs between its peak at the end of 2004 and its trough early this year, and had regained less than 700 by the end of the second quarter.

Unlike most metros, Pittsburgh did not lose many jobs. The report also points out that Pittsburgh's historical peak employment is quite recent. More salient to the recovery is the rebound of jobs. Among its Great Lakes cohort, Pittsburgh is number 1 with 26.3% peak employment jobs recovered. As for the nation, that rate ranks 10th. In terms of jobs, Pittsburgh is bouncing back faster than anywhere else in the Rust Belt.

Those numbers concern job growth, a statistic chronically underwhelming for Pittsburgh. Seeing Pittsburgh on top of such a list should be astounding, worthy of recognition. I guess no one wants to jinx the recovery.

The issue is rate of recovery. It's all relative to what Pittsburgh lost and how other regions are faring. My understanding is that Pittsburgh is slow into the recession and slow out of it. Other regions typically bounce back more quickly. In the latest Brookings Great Lakes report, the opposite is true.

Another number to track is peak workforce. Pittsburgh hit that historic high during the recession.